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HomeMy WebLinkAbout13-Finance CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION Date: May 20,2008 Subject: Resolution authorizing an agreement with National Retirement Solutions, Inc. for services as administrator of the City of San Bernardino Deferred Compensation Plan. o From: Barbara Pachon Dept: Finance Department MlCC Meeting Date: June 16,2008 Synopsis of Previous Council Action: September 4,2001 Resolution 2001-277, Mayor and Common Council authorized an agreement with Nationwide Retirement Solutions Inc to administer City's deferred compensation programs September 10,1999 Resolution 1999-217 Mayor and Common Council authorized an agreement with National Deferred Compensation for services as administrator of the City's deferred compensation programs. December 21, 1993 Resolution 93-461, Mayor and Common Council authorized an agreement with Great Western Savings for services as administrator of the City's deferred compensation programs. o Recommended Motion: Contact person: lim !=:h.....r Phnne: 384-5744 Adopt Resolution Supporting data attached: yes Ward: all FUNDING REQUIREMENTS: Amount: No cost to the city; new revenue to the General Fund of $48,000 in FY08/09 Source: (Acct. No.) (AI'"rt nl:tocI"riptinn) o Finance: Council Notes: fL)(J./3 c o c CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION Staff Report Subiect: Resolution authorizing execution of an agreement with Nationwide Retirement Solutions, Inc. for services as administrator of the City of San Bernardino Deferred Compensation Plan. Backaround: Nationwide Retirement Solutions has served as the plan administrator for the City of San Bernardino Deferred Compensation Plan since 1998 and has done an outstanding job of administering the City's plan, which now holds $50 million in assets. The Deferred Compensation Plan is a benefit offered by the City and entirely comprised of employee monies in an IRS approved 457 Plan. The City chose Nationwide Retirement Solutions (NRS) in 2001 during a formal RFP process and they competed with nine other respondents. The 2001 response from NRS was the most comprehensive and agreed to provide the City with a Deferred Comp program for no fees if the City agreed to a five-year contract with two one-year renewal options. The City has found NRS very professional in the services they provide and the administration of this program. The current agreement with NRS will expire in September of this year. The City Deferred Compensation Advisory Board authorized an RFP committee be established at its January 2008 meeting. Jim Sharer, Glenn Parkerson, and Roger Poyser were appointed to this committee, with Georgia Chamberlain as the Finance Department non-voting representative. The committee discussed the RFP process and determined that the Committee and the Advisory Board were pleased with the performance, investment instruments and no-fee costs of the current administrator. The committee moved to enter into negotiations with NRS to continue providing Plan Administrative Services, and seek additional services from the provider. As a result of the negotiations, NRS has agreed to continue with all terms of the current Deferred Compensation Administrative Agreement unchanged, including the current no fee provision. Under a new provision of the contract, they will reimburse the City $48,000 per year, with a three percent (3%) annual increase, for the cost of administering the program. They will also provide a budget of $5,000 per year for Deferred Comp Advisory Board members to attend training. Other new programs include the inclusion of the "Public Safety Health Provision" as approved by the Pension Protection Act of 2006. The Public Safety provision allows retired public safety Deferred Comp participants to receive $3,000 of their deferred compensation account per year, tax-free, to pay for health insurance premiums. Target- date retirement funds will be added as another option for plan participants, and the option of a Plan Sponsored Loan Program is included. c o o The proposed agreement is for a six-year term with two two-year renewal options. The RFP Committee presented the negotiated agreement to the full Deferred Compensation Advisory Board at the regularly scheduled meeting of April 23, 2008. The Board unanimously voted to accept the negotiated agreement and send it to the Mayor and Common Council for council action. If approved by the Mayor and Common Council, this resolution will authorize this Negotiated Purchase with Nationwide Retirement Solutions, Inc. per Municipal Code ~3.04.01 0 (B) (3). In this situation, the negotiated purchase is requested due to the vendor's knowledge and terms for the provision of deferred compensation plan administrative services. FinanciallmDact: No cost to the City. City will receive $48,000 in new revenue for FY 2008/09. Recommendation: Adopt Resolution 01 03 05 2 RESOLUTION NO. RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING THE EXECUTION OF AN AGREEMENT WITH NATIONWIDE RETIREMENT SOLUTIONS, INC. FOR SERVICES AS ADMINISTRATOR OF THE CITY OF SAN BERNARDINO DEFERRED COMPENSATION PLAN. 3 4 5 BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: 6 SECTION 1. The Mayor and Common Council of the City of San Bernardino hereb 7 authorize an Agreement with Nationwide Retirement Solutions, Inc. for services as administrato 8 9 of the City of San Bernardino Deferred Compensation Plan (457) for full-time employees. Th 10 Mayor and Common Council hereby authorize the City Manager to execute said agreement 0 11 behalf of the City; a copy of the Agreement is attached hereto as Exhibit A and incorporate :.- 12 herein. SECTION 2. This purchase is exempt from the formal contract procedures of Section 14 3.04.010 of the Municipal Code, pursuant to Section 3.04.010B.3 of said Code, "Purchases 15 approved by the Mayor and Common Council". 16 17 SECTION 3. Any amendment or modification thereto shall not take effect or become operative until fully signed and executed by the parties and no party shall be obligated hereunder 18 19 until the time of such full execution. No oral agreements, amendments, modifications or waivers 20 are intended or authorized and shall not be implied from any act or course of conduct of any party. This resolution is rescinded if the parties to the contract fail to execute it within sixty (60) 21 22 days of the passage of this resolution. 23 IIIII 24 BCL:C:lDocumcnts.... SettingslsbarcrjaIMy Documents\DefComp Reso 2008.doc Ir /6-(76 ./lJo.J3 6 on the day of 7 Council Members: AYES 8 ESTRADA 9 BAXTER 10 BRINKER 11 DERRY 12 KELLEY 013 JOHNSON 14 McCAMMACK 15 16 01 025 2 RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING THE EXECUTION OF AN AGREEMENT WITH NATIONWIDE RETIREMENT SOLUTIONS, INC. FOR SERVICES AS ADMINISTRATOR OF mE CITY OF SAN BERNARDINO DEFERRED COMPENSATION PLAN. 3 4 I HERBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and 5 Common Council of the City of San Bernardino at a meeting thereof, hel , 2008, by the following vote, to wit: NAYS ABSTAIN ABSENT 17 The forgoing Resolution is hereby approved this _ day of CITY CLERK ,2008. 18 19 20 Patrick 1. Morris, Mayor City of San Bernardino 21 Approved as to form: 22 lAMES F. PENMAN, City Attorney 23 24 BCL:C:lDocuments and SettingslsharerjaIMy Documents\DefComp Reso 200S.do<: 01 2 .d: Deferred Compensation Plan Administration Agreement 3 4 This Deferred Compensation Plan Administration Agreement is effective this day of by and between Nationwide Retirement Solutions, Inc., a wholly owned subsidiary of NFS Distributors, Inc., a wholly owned subsidiary of Nationwide Financial Services, Inc. an Ohio Corporation (hereinafter 'NRS'), and the City of San Bernardino, California (hereinafter "EMPLOYER'). 5 6 7 8 9 10 WHEREAS, EMPLOYER, pursuant to and in compliance with Internal Revenue Code Section 457, previously established a Deferred Compensation Plan, hereinafter referred to as PLAN; and 11 12 13 16 WHEREAS, EMPLOYER, pursuant to its Request for Negotiated Purchase (hereinafter "RNP") dated February 19, 2008, solicited bids to provide plan administration and recordkeeping services; and 17 18 WHEREAS, NRS responded to such RNP; and 19 20 WHEREAS, the EMPLOYER, desires to enter into a formal agreement pursuant to the terms of the RNP; and 21 22 23 WHEREAS, NRS desires to provide such non-discretionary administration and recordkeeping services subject to the terms and conditions set forth herein: 24 25 26 NOW THEREFORE, EMPLOYER and NRS agree as follows: 27 o 1. DESIGNATION San Bernardino Administrative A~)("lilft)ff ~fJ(iied Compensation Program - 1 01 2 d: 27 o EMPLOYER designates NRS as Administrator for deferred compensation funds. 3 4 2. TERM 5 6 This Agreement shall remain in effect for an initial term of 6 years commencing as of the date listed herein, with the option for two (2) successive renewals thereafter at the Deferred Compensation Advisory Board of the EMPLOYER's option for two (2) years each or until it is terminated by one or both parties in accordance with the provisions of this Agreement. 7 8 9 10 11 3. DEFAULT 12 13 In the event the Agreement is terminated for 'Cause" (which shall mean the failure of either party to perform any or all of its obligations as defined herein); the non-defaulting party shall give the defaulting party written notice, specifying the particulars of the default. If such . default is not cured within sixty (60) days from the date in which notice of default is given, the non-defaulting party may terminate the Agreement effective thirty (30) days after the end of the sixty (60) day period. 16 17 18 19 20 4. INVESTMENT OPTIONS 21 22 NRS agrees to accept deferred compensation plan funds for investment in the investment options referenced in Exhibit A hereto or such other options as mutually agreeable to the parties. 23 24 25 26 A. The following provisions will apply: San Bernardino Administrative i!:i(1ilillrif ~~i/ed Compensation Program - 2 01 2 3 4 5 6 7 8 9 10 11 B. 12 13 1. The investment options referenced in Exhibit A win be available to the Plan Participants. Dividends (if applicable) will be automatically reinvested into the mutua fund. 2. Investment Management or other charges may be imposed on any of the investmen options by the provider of such investment option. These charges will be disclosed in the investment option prospectus or other informational brochure. These charges, and along with any operating expenses of the investment, would be separate from any fees or charges described in this Agreement. Participants will be permitted to change their investment options as often as they wish, however, they shall be subject to any applicable penalty, charge, or restriction imposed for such change. 014 15 5. INVESTMENT GUIDANCE AND EDUCATION 16 17 A. NRS agrees to provide reports and information for the analysis by the EMPLOYER of Plan investments on an annual basis or upon any other frequency as the parties mutually agree. Services shall include and relate to all investment options of the Plan as follows: 18 19 20 21 22 1. General investment consulting and advice. 2. Monitoring and reporting of returns and evaluation of performance. 3. Discussion of reasons for underlover performance and performance in relation to an investment options objectives and alternatives. 23 24 25 26 27 B. Based upon the information in "A' above, NRS agrees to provide performance information to the EMPLOYER each year by April 1 regarding whether an investment 08 San Bernardino Administrative Agreement for Deferred Compensation Program - 3 Exhibit "A" 01 014 15 08 2 should be retained, deleted, or added to the list of available investment options of the Plan. 3 4 C. Actions taken regarding the addition or deletion of investment options shall be specifically authorized by the Deferred Compensation Advisory Board of the EMPLOYER. 5 6 7 8 D. NRS shall also provide education to Plan participants regarding the various investment options offered under the Plan. 9 10 11 6. ESTABLISHMENT OF ACCOUNTS 12 13 A. ENROLLMENT SERVICES 16 NRS agrees to process, or arrange to have processed, the enrollment of eligible employees who elect to participate in the Plan. NRS agrees to provide information and promotional material pursuant to the Plan for distribution to employees of EMPLOYER, subject to approval of such material by the Deferred Compensation Advisory Board of the EMPLOYER, such approval not to be unreasonably withheld. EMPLOYER agrees to 17 18 19 20 allow and facilitate the periodic distribution of such material to employees. 21 22 NRS agrees to conduct group presentations periodically for employees of EMPLOYER, to explain the Plan. The Deferred Compensation Advisory Board of the EMPLOYER agrees to facilitate the scheduling of such presentations and to provide facilities at which satisfactory attendance can be expected. NRS agrees that qualified personnel will be made available periodically to discuss the Plan with individual employees of 23 24 25 26 27 EMPLOYER. San Bernardino Administrative A9~i(i1)t)(tD('~i(d Compensation Program - 4 01 10 11 12 13 014 15 16 17 18 19 20 21 22 23 24 25 26 27 08 B. DEFERRALS 2 3 The minimum participant deferral per pay period shall be not less than $10.00. 4 5 C. EMPLOYER agrees to: 6 7 1. Cause appropriate deductions to be made from such payroll(s) as may be applicable and send the funds representing the total participant deferrals to NRS. 8 9 2. Provide to NRS in such electronic or magnetic media designated by NRS, a deferral listing with respect to participant sub-accounts to include not less than the following: Name of participant Social security number of participant Amount to be credited to participant's sub-account(s) 3. Funds may be sent by wire transfer, through an automated clearinghouse or by check in accordance with written instructions provided by NRS. Failure to follow the. written instructions provided by NRS may result in delay of posting to Participant accounts. 4. Funds will be posted no later than the business day following the day on which the funds and the deferral listing are received by NRS. NRS will not be liable for any delay in posting if EMPLOYER fails to send either the funds representing deferral amounts or deferral information in accordance with NRS's instructions to the central processing site designated by NRS. 5. Authorize NRS to act upon instruction given by Participants pursuant to their San Bernardino Administrative Ai'ee~~~~for Deferred Compensation Program - 5 cxmDit "A" 01 2 personal identification number (PIN), such PINs Can be used to obtain certain services as designated by NRS. 3 4 D. NRS agrees to: 5 6 1. Establish a sub-account for each participant. 7 9 2. Post and credit the amounts sent by EMPLOYER to the sub-account(s) of Participants in accordance with the latest written instructions on file with NRS. 8 10 11 7. PARTICIPANT SERVICES 12 A NRS will provide a dedicated toll free telephone number which shall be operative 24 .. 13 hours per day, 7 days per week (less normal maintenance time) for the Interactive Voice q: Response (IVR), and for live Participant Service Representatives, Monday through Friday, 8 a.m. - 8 p.m. Eastern time, each business day. Using this number, participants 16 may obtain information about participant accounts. EMPLOYER authorizes NRS to 17 honor instructions, which may be submitted by participants using this number, either via 18 the interactive voice response system (IVR), or to a live representative. Participant 19 instructions may be in such form and content as may be mutually agreed to by NRS and 20 EMPLOYER. 21 22 B. NRS will provide Plan participants unlimited opportunities to increase (within limitations 23 of Sec. 457) or decrease deferral amounts. All requests to increase or decrease deferral 24 amounts will be processed by NRS within five (5) business days of receipt of the request 25 and will be effective as soon as administratively practical by EMPLOYER. 26 27 C. NRS will provide Plan participants unlimited opportunities to redirect Mure deferral 08 amounts to any other investment option offered by the Plan. All requests will be San Bernardino Administrative Agreement for Deferred Compensation proqram - 6 Exhibit "A" 01 processed within five (5) business days of receipt and will be effective with the next pay 2 period deferral. 3 4 D. NRS will provide participants the daily ability to exchange existing account balances 5 from one investment option offered by the Plan to another (except for the limitation 6 described in Section 4 above). Exchange requests will be processed with the investmen 7 option being "sold' by the next business day NRS receives such instructions and will be 8 effective in the new investment not later than the day following NRS's receipt of funds 9 from the "sold' investment. 10 11 E. NRS will provide participants, if they request, a fund prospectus (or other informational 12 brochure as applicable) and an annual report for each investment option offered by the 13 Plan. Specific mutual fund prospectuses and other relevant information are to be Q: provided by each respective mutual fund or other investment provider upon request by NRS or a participant. 16 17 F. NRS will provide participants consolidated quarterly statements detailing participant's 18 year-to-date deferral amounts, account balance information that includes changes in 19 account value since the previous report date and any fees or charges assessed against 20 the Participant account. Participants shall be informed that they must notify NRS within 21 ninety (90) days of receipt of their statements or confirmation of their investments, to 22 report any errors to NRS. NRS will not be liable for any errors not reported within this 23 time frame. 24 25 G. NRS agrees to mail 90% of these statements to participants within twenty (20) business 26 days after the end of each calendar quarter. NRS will have no responsibility to report, or 27 account for the accuracy of information applicable to periods prior to the effective date 08 such Plan was administered by NRS. San Bernardino Administrative Agreement for Deferred Compensation Program - 7 Exhibit "A" 01 014 15 06 2 H. NRS will provide certain standard reports quarterly to EMPLOYER to enable EMPLOYER to effectively monitor all accounting and record-keeping processes. These reports will include combined data for an entire Plan. (Fees and charges assessed will be disclosed in these reports.) In addition, all services will be provided in accordance with these reports. Copies are available upon request. 3 4 5 6 7 6 I. NRS agrees to maintain, for a reasonable time, the records necessary to produce the above mentioned reports, and agrees that all records shall be the property of EMPLOYER. EMPLOYER agrees that all related computer tapes, disks and programs shall remain the property of NRS. 9 10 11 12 -. 13 J. NRS agrees to review submitted unforeseeable emergency withdrawal applications and make a determination regarding approval or denial based upon its interpretation of the Plan document and the requirements of the Internal Revenue Code. 16 17 8. DISTRIBUTIONS 16 19 A. NRS will assist the participant in preparing the necessary forms to select hislher distribution option. 20 21 22 B. All lump sum distributions from participant accounts shall be made within five (5) business days of the earliest day permitted by the Plan. 23 24 25 C. For emergency/hardship withdrawal requests, NRS shall process or reject applications within five (5) business days. 26 27 San Bernardino Administrative Agreement for Deferred Compensation Program - 8 Exhibit "A" 01 D. NRS will provide necessary forms and process payments from the participant's account, 2 to the company selected by the Plan to provide annuity options to participants. 3 Participant will be required to submit property completed forms to NRS in a time frame 4 necessary to effectuate the 'payment begin date' requested by participant. 5 6 E. NRS shall offer to participants for distribution of their account a designated amount 7 payment option. Payments shall be made on a monthly, quarterly, semi-annual or 8 annual basis as specified by the participant, in equal installments (not less than $25.00 9 per payment) until the amount applied, adjusted each business day for investment 10 results, is exhausted. The final installment will be the sum remaining at the time such 11 payment is due. 12 13 F. NRS shall offer to Plan participants a designated period payment option with a variable 14 payment. Payments shall be made monthly, quarterly or annually for any specified 05 number of years as permitted by the Plan, at the discretion of the Plan participant. The 16 amount of each variable payment shall be determined by dividing the Participant's 17 current portfOlio balance by the number of remaining payments. 18 19 G. NRS shall offer to Plan participants the ability to request a 'Priority Distribution' option. 20 This option allows participants to designate a specific investment option from which their 21 distributions will be made. Processing of priority distributions will continue until such time 22 that the balance in the selected investment option is no longer adequate to make the 23 elected distribution. At that time, additional distributions will be made on a pro-rata basis 24 from all investment options. 25 26 H. All payment options are available for all investment options. Participants selecting the 27 options in E, F, or G above shall be subject to the same fees and charges, and 0 permitted the same exchange opportunities, as an active or inactive participant as San Bernardino Administrative Agreement for Deferred Compensation Program - 9 Exhibit "A" 01 014 15 08 2 defined by the Plan. Processing of these options will be. completed by NRS upon receipt of properly completed forms, in a time frame necessary to effectuate the "payment begin date" on the third Monday of each month. Processing of the distribution option will be completed within three (3) business days of the payment begin date. All distributions will be made pro-rata from each of the Participant's investment options. 3 4 5 6 7 I. NRS will be responsible for preparing and filing all reports required by federal and state taxing authorities through the effective date of the termination of the contract. EMPLOYER shall be responsible for all reporting requirements for periods prior to the effective date of this contract, or after the termination date of this contract. NRS will be responsible for the annual filing of individual 1 099 or W-2 forms, unless by contract between EMPLOYER and an Investment Provider, the forms are prepared by the Investment Provider that provides annuity payments to participants. NRS shall withhold income taxes from distributions as required, and remit said taxes to appropriate regulatory authorities. NRS shall also prepare and file periodic and annual tax returns fo said amounts withheld. 8 9 10 11 12 13 16 17 18 J. NRS agrees to provide plan participants anticipating retirement or other separation from service with illustrations indicating monthly benefit payments at an assumed interest rat for savings accounts or an assumed rate of eamings for mutual fund investments. Such assumed interest rate or rate of earnings shall be for illustration purposes only. The actual interest rate/yield paid on saving products during distribution shall change quarterly. For mutual funds, earnings will be those actually earned. 19 20 21 22 23 24 25 9. TERMINATION 26 27 Upon the effective date of termination of this Agreement, the following shall occur. San Bernardino Administrative Agreement for Deferred Compensation Program - 10 I:vhihit "4" 01 A. NRS will no longer accept deferrals. In addition, upon "notification of termination, NRS 2 will cease opening certificate of deposits, if applicable. d: o 3 4 B. NRS will provide EMPLOYER a copy of all records relating to participant sub-accounts, in hard copy or such other form as mutually agreed upon between NRS and EMPLOYER, within ninety (90) days after the effective date of termination. 5 6 7 8 C. This Agreement may be terminated for the convenience of the EMPLOYER upon thirty (30) days written notice to NRS. Upon such notice, NRS shall provide all records as noted in Section B to 9 10 EMPLOYER. 11 12 D. If termination is due to either party exercising the right of termination described in Section 3 above, within 45 days of the effective date of termination, NRS will transfer savings account balances (less any early withdrawal penalty imposed) to EMPLOYER, or to such other entity as EMPLOYER may designate in writing. Mutual funds will be transferred to EMPLOYER or to such other entity as EMPLOYER may designate in writing. 13 16 17 18 19 E. Accounts in distribution will be transferred to EMPLOYER or its designee in accordance with the time frame described above. 20 21 22 10. FEES AND EXPENSES 23 24 The fee for the investment options shall be 0.00% except as noted on Exhibit B. Exhibit B contains the terms and conditions under which a fee will be applied to specified investment options under the Plan. Any fees, including investment management fees, associated with the investment options are separate from fees imposed by NRS as administrator of the Plan. 25 26 27 San Bernardino Administrative Agreement for Deferred Compensation Program - 11 Exhibit itA II 01 014 15 08 2 NRS shall receive, as its compensation for services provided pursuant to this Agreement, the service payments from the Plan's investment options or their affiliates. Further information on the service payments that Nationwide receives from investment options or their affiliates is attached in Exhibit C. 3 4 5 6 7 NRS shall provide EMPLOYER up to $5000.00 per year from the service payments that ar received from the Plan's investment options (or their affiliates) to reimburse EMPLOYER fo the training expenses of the Deferred Compensation Advisory Board of the EMPLOYER'S board members. NRS shall also provide EMPLOYER $48,000.00 in the first year of this Agreement from the service payments that are received from the Plan's investment options (or their affiliates) to reimburse EMPLOYER for the salary of an Accountant I position. This amount used to reimburse EMPLOYER for an Accountant I salary shall be increased by 3 each year after the first year that this Agreement remains in effect. 8 9 10 11 12 13 16 Should the service payments that are received from the Plan's investment options (or their affiliates) be insufficient to compensate NRS for the services provided pursuant to this ~greement or to reimburse EMPLOYER for the training expenses of the Deferred Compensation Advisory Board of the EMPLOYER'S board members or for the salary of an Accountant I position, EMPLOYER agrees to renegotiate the fees, expenses and Nationwide's compensation under this Agreement. 17 18 19 20 21 22 23 11. CONFIDENTIALITY 24 25 NRS agrees that all information supplied to and all work processed or completed by NRS shall be kept confidential and will not be disclosed except as required by law. 26 27 San Bernardino Administrative Agreement for Deferred Compensation Program - 12 Exhibit "A" 01 12. PRIVITY OF CONTRACT 2 d: 08 3 NRS and Plan Participants shall have no privity of contract with each other. 4 5 13. TITLE AND OWNERSHIP 6 7 In accordance with the provisions of Internal Revenue Code Section 457, all account(s) established under this Agreement shall be held in the name of EMPLOYER, or by a Trustee/Custodian with a multi-employer .omnibus account" for the benefit of participants, in accordance with the Plan. 8 9 10 11 12 14. CIRCUMSTANCES EXCUSING PERFORMANCE -. 13 16 Neither party to the Contract shall be in default by reason of failure to perform in accordance with its terms if such failure arises out of causes beyond reasonable control and without fault or negligence on their part. Such causes may include, but are not limited to, acts of God or public enemy, acts of the governmentin either its sovereign or contractual capacity, fires, floods, epidemics, quarantine or restrictions, freight embargoes, and unusually severe weather. 17 18 19 20 21 15.INDEMNIFICATION 22 23 NRS agrees to defend, indemnify, and hold harmless the EMPLOYER, its officials, employees, and agents from all loss. cost, and expense arising out of any loss or injury sustained by anyone in connection with NRS's acts, errors, or omissions, or any of those of its officers, agents, or employees. whether such act is authorized by this agreement or not; and shall pay for any and all damages to EMPLOYER's property and funds of the EMPLOYER, or loss or theft of such property or funds. The Provisions of this Article do not 24 25 26 27 San Bernardino Administrative Agreement for Deferred Compensation Program - 13 Eyhihit "A" 01 10 11 12 13 d: 16 17 18 19 20 21 22 23 24 25 26 27 o 2 apply to any damage or loss caused solely by the acts, errots, or omissions of the EMPLOYER, its officials, employees, or agents. 3 4 EMPLOYER agrees to defend, indemnify, and hold harmless NRS, its officials, employees, and agents from all loss, cost, and expense arising out of any loss or injury sustained by anyone in connection with the EMPLOYER's acts, errors, or omissions, or any of those of its officers, agents, or employees, whether such act is authorized by this agreement or not; and shall pay for any and all damages to NRS's property and funds of NRS, or loss or theft of such property or funds. The Provisions of this Article do not apply to any damage or loss caused solely by the acts, errors, or omissions of NRS, its officials, employees, or agents. 5 6 7 8 9 16. PREVAILING PARTY The prevailing party in any legal action to enforce or interpret any provision of this Agreement will be entitled to recover from the losing party all reasonable attomeys' fees, court costs, and necessary disbursements in connection with that action. The costs, . salary, and expenses of the City Attorney and members of his office, in connection with that action shall be considered as attorneys' fees for the purposes of this Agreement. 17. ASSIGNABILITY No party to this Agreement shall assign the same without the express written consent of the other party, which consent shall not to be unreasonably withheld. This provision shall not restrict NRS's right to delegate certain services to an agent, including any affiliate. Unless agreed to by the parties, no such assignment shall relieve any party to this Agreement of any duties or responsibilities herein. 18. PARTIES BOUND San Bernardino Administrative Agreement for Deferred Compensation Program - 14 Exhibit "A" 01 014 15 08 2 This Agreement and the provisions thereof shall be binding upon and shall inure to the benefit of the successors and assigns of the respective parties. 3 4 19. APPLICABLE LAW 5 6 This Agreement shall be construed in accordance with the laws operating within the State of Califomia. 7 8 9 20. UNLAWFUL PROVISIONS 10 11 In the event any provisions of this Agreement shall be held megal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts of the Agreement, but the same shall be construed and enforced as if said illegal or invalid provisions had never been inserted herein. Notwithstanding anything contained herein to the contrary, no party to this Agreement will be required to perform or render any services hereunder, the performance or rendition of which would be in violation of any laws relating thereto. ;-- 12 13 16 17 18 21. MODIFICATION 19 20 This writing is intended both as the final expression of the Agreement between the parties and as a complete statement of the terms of the Agreement. No modification of this Agreement shall be effective unless and until such modification is evidenced by a writing signed by both parties. 21 22 23 24 25 22. NO WAIVER 26 27 The failure of either party to enforce any provision of this Agreement shall not be construed as a waiver of that provision or of any other provision in the Agreement and neither party San Bernardino Administrative Agreement for. Deferred Compensation Program - 15 Fvhibit "A" 01 2 014 lS 08 may, at any time, enforce the provision previously waivelf, unless a modification to this Agreement has been executed. 3 4 23. SEVERABILITY S 6 The provisions of this Contract are severable, and, if for any reason a clause, sentence, paragraph, or other part of this Contract shall be determined to be invalid by a court or federal or state EMPLOYER, board, or commission having jurisdiction over the subject matter thereof, such invalidity shall not affect other provisions of this Contract which can be given effect without the invalid provision. 7 8 9 10 11 12 24. NOTICES -. 13 16 All notices and demands to be given under this Agreement by one party to another shall be given by certified or United States mail, addressed to the party to be notified or upon whom a demand is being made, at the addresses set forth in this Agreement or such other place a either party may, from time to time, designate in writing to the other party. Notice shall be deemed received on the earlier of, 3 days from the date of mailing, or the day the notice is actually received by the party to whom the notice was sent. 17 18 19 20 21 22 23 24 2S 26 27 San Bernardino Administrative Agreement for Deferred Compensation Program - 16 ~yhih;. II A II 23 By: 24 25 Date: 26 27 08 01 014 15 If to NRS: Nationwide Retirement Solutions, Inc. - Attention: Lance Kesterson 2 3 5900 Parkwood Drive 4 Dublin, Ohio 43016 5 6 If to EMPLOYER: City of San Bernardino Attn: Georgia Chamberlain, Deferred Compensation Liaison 300 North "0" Street San Bernardino, California 92418-0001 7 8 9 10 11 25. ENTIRE AGREEMENT 12 13 This Agreement, along with any other investment product contracts necessitated by Exhibit A, constitutes the entire agreement between the EMPLOYER and NRS, its affiliates, successors, or assigns. The Parties warrant that this Agreement replaces and supercedes any prior agreement between the Parties or their affiliates. 16 17 18 IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective on - the date first written above. 19 20 21 EMPLOYER Nationwide Retirement Solutions, Inc. 22 By: Date: APPROVED AS TO FORM: James F. Penman, City Attorney ':;;.'1,;:" _J"'- By: San Bernardino Administrative Agreement for Deferred Compensation . Program - 17 I=vhibit "A" 01 ~: 08 Exhibit A 2 3 This Exhibit is hereby made part of the Deferred Compensation Plan Administration Agreement between NRS, and EMPLOYER. These investment options, or those added through subsequent amendment or exhibit are the current investment options available under the deferred compensation plan. Further: 4 5 6 7 8 A. EMPLOYER and NRS agree that the following investment options in this Exhibit, or those added through subsequent amendment or exhibit are the onlv investment options available under the deferred compensation plan. 9 10 11 12 B. EMPLOYER and NRS agree that the Deferred Compensation Advisory Board of the EMPLOYER must agree to all changes in the investment options made available to the Plan, except those changes required directly by the investment provider. 13 16 C. EMPLOYER agrees the effective date for offering new investment options will be the first day of the month at least one month subsequent to the month an Amended Exhibit A may b~ executed, or such other date upon which the parties mutually agree. 17 18 19 20 List of I nvestment Options 21 22 Investor Destinations Aggressive Fund - Service Class Investor Destinations Conservative Fund - Service Class Investor Destinations Moderate Fund - Service Class Investor Destinations Moderately Aggressive Fund - Service Class Investor Destinations Moderately Conservative Fund - Service Class Oppenheimer Global Fund - A 23 24 25 26 27 San Bernardino Administrative Agreement for Deferred Compensation Program - 18 Exhibit "4" o 0: o American Funds EuroPacific Growth Fund 2 Dreyfus Intemational Stock Fund DFA U.S. Micro Cap Company Portfolio Allianz NFJ Small Cap Value Fund LeggMP Small Cap Growth - Class A Neuberger Berman Genesis - Trust Class American Century Vista Fund Dreyfus MidCap Index Fund JP Morgan MidCap Value A American Century Equity Income Fund Fidelity Contra Fund Fidelity Equity Income Fund American Funds Growth Fund of America 3 4 5 6 7 8 9 10 11 12 13 American Funds Investment Company of America Janus Fund 16 Neuberger Berman Socially Responsive Fund Nationwide Fund - A 17 18 Vanguard Windsor II Fund Vanguard InstiMionallndex Portfolio 19 20 American Funds Income Fund of America 21 PIMCO High-Yield Fund - Administrative Shares PIMCO Total Retum Fund - Administrative Shares Vanguard Total Bond Market Index Fund T. Rowe Price Retirement 2015 Advisor T. Rowe Price Retirement 2025 Advisor T. Rowe Price Retirement 2035 Advisor T. Rowe Price Retirement 2045 Advisor 22 23 24 25 26 27 San Bernardino Administrative Agreement for Deferred Compensation Program - 19 E:vhihit "A II 5 Galliard Stable Value Fund 6 7 8 EMPLOYER: 9 10 11 By: 12 13 01 2 3 4 14 Date: 05 16 17 18 19 20 21 22 23 24 25 26 27 08 T. Rowe Price Retirement Income Fund Advisor Washington Mutual Liquid Savings Accounts Washington Mutual Certificates of Deposit Nationwide Life Insurance Company Group Fixed Annuity Contract TSP-557 Nationwide Retirement Solutions, Inc. By: :.- Date: APPROVED AS TO FORM: James F. Penman, Cily Attorney By: San Bernardino Administrative Agreement for Deferred Compensation Program - 20 Exhibit "A" 01 2 3 4 5 6 7 8 Exhibit B Effective June 16, 2008, this Exhibit B becomes part of the Deferred Compensation Plan Administration Agreement (hereinafter "Agreement") between Nationwide Retirement Solutions, Inc. (hereinafter "NRS") and the City of San Bernardino, California (hereinafter "EMPLOYER") and is designed to memorialize the following additional terms that will apply to the offering of various investment options under the Agreement. 10 9 Galliard Stable Value Fund: 11 1. 12 13 14 05 2. 16 17 18 19 3. 20 21 22 23 4. 24 25 26 27 08 NRS will provide administration and recordkeeping services as described in the Agreement for the Stable Value Fund (hereinafter "SVF") offered through Galliard Capital Management, Inc. The SVF is not a mutual fund, but rather a collective investment trust or a pooled fund. Charges and reimbursements for this investment option are different from those of traditional mutual funds. The fee for the SVF includes a Galliard Management Fee of .15% as well as a Plan Administration fee. The total of these fees will be included daily in the unit value calculation of the participant's value in the SVF, and will not be reflected as a charge on the account. The Plan Administration Fee shall be the difference between the .59% and the Galliard Management Fee, which represents the total fee on an annualized basis. San Bernardino Administrative Agreement for Deferred Compensation Program - 21 Exhibit "A" 7 Date: 8 9 10 11 12 13 14 05 16 17 18 19 20 21 22 23 24 25 26 27 0 01 2 EMPLOYER: 3 4 By: 5 6 APPROVED AS TO FORM: James F. Penman, City Attorney By: Nationwide-Retirement Solutions, Inc. By: Date: San Bernardino Administrative Agreement for Deferred Compensation Program - 22 Exhihit II A II 01 0.14 15 08 Exhibit C 2 Nationwide Retirement Solutions, Inc., offers a variety of unregistered group variable annuity contracts and mutual fund platforms (collectively referred to as "retirement products'). Those retirement products are sold exclusively in the public sector retirement markets through NRS's life insurance and trust company affiliates (collectively referred to as the "Nationwide companies') 3 4 5 6 7 8 The variable accounts, trust accounts, or custodial accounts (the "Accounts') that accompany the retirement products offer investment options, and purchase and sell shares of certain mutual funds in the aggregate each day so that the performance of the investment options corresponds to the performance of those mutual funds. When the Accounts aggregate these transactions, the mutual fund does not incur the expense of processing individual transactions that it would incur if it sold its shares to the public directly. This expense is instead incurred by the Nationwide companies. 9 10 11 12 13 16 The Nationwide companies also incur the distribution costs associated with selling the retirement products, which benefits the mutual funds by providing contract owners and participants with investment options that correspond to the underlying mutual funds. An investment adviser or subadviser of a mutual fund or its affiliates may provide the Nationwide companies with wholesaling services that assist in the distribution of the retirement products and may pay to participate in educational and/or marketing activities. These activities may provide the adviser or subadviser (or their affiliates) with increased exposure to persons involved in the distribution of the retirement products. 17 18 19 20 21 22 23 24 25 In light of the above, certain mutual funds or their affiliates make payments to the Nationwide companies (the "payments'). The amount of these payments is typically based on an agreed upon percentage times the amount of assets that the Accounts invest in the mutual funds. These payments may be used for any corporate purpose, which includes reducing the price of 26 27 San Bernardino Administrative Agreement for Deferred Compensation' Program - 23 Exhibit nAil o 2 d: o 3 the retirement products, paying expenses that the Nationwide companies incur in promoting, marketing, and administering the retirement products, and achieving a profit. The Nationwide companies receive the following types of payments: 4 5 . Mutual fund 12b-1 fees, which are deducted from mutual fund assets; . Sub-transfer agent fees or fees pursuant to administrative service plans adopted by the mutual fund, which may be deducted from mutual fund assets; and . Payments by a mutual fund's adviser or subadviser (or its affiliates). Such payments 6 7 8 9 may be derived, in whole or in part, from the advisory fee that is deducted from mutual 10 fund assets and reflected in the mutual fund charges. 11 12 Furthermore, the Nationwide companies benefit when assets are invested in Nationwide's 13 affiliated mutual funds (i.e., Nationwide Variable Insurance Trust and/or Nationwide Mutual 16 Funds) because their affiliates also receive compensation from the mutual funds for investment advisory, administrative, transfer agency, distribution, and/or other services. Thus, the Nationwide companies may receive more revenue with respect to affiliated mutual funds than unaffiliated mutual funds. 17 18 19 The Nationwide companies took these anticipated payments into consideration in determining the charges they impose under the retirement products (apart from fees and expenses imposed by the mutual funds). Without these payments, the Nationwide companies would have imposed higher charges on their retirement products. 20 21 22 23 24 For the year ended December 31,2007, for public sector retirement products, the maximum payments that the Nationwide companies received from the mutual funds and their affiliates (as a percentage of the average daily net assets of the mutual funds attributable to the retirement products) and weighted average payments were: 25 26 27 San Bernardino Administrative Agreement for Deferred Compensation Program - 24 Exhibit "A" 01 2 14 05 o Maximum Percentage Weighted Averages" 0.266% Public sector retirement 0.75% 3 products* 4 *Excludes select public sector retirement plan assets where the Nationwide companies either do not have agreements to receive any payments from the mutual funds or do not retain payments from the mutual funds. 5 6 7 **Weighted averages are the product of actual payments the Nationwide companies earned divided by 8 annual average mutual fund assets (using quarter-end balances). All mutual funds available in a line of business are included when determining average mutual fund assets, regardless of whether the mutual funds or their affiliates actually made any payments to the Nationwide companies during the year, 9 10 11 subject to the exclusion noted above. 12 13 Most mutual funds or their affiliates have agreed to make payments to the Nationwide companies, although the amount of the payment may vary from mutual fund to mutual fund. Some mutual funds may not make any payments at all. 16 17 The amount of the actual payments the Nationwide companies receive is based on an agreed upon percentage times the amount of assets invested by the Accounts in the mutual funds. As such, the Nationwide companies may receive higher payments from mutual funds that pay a lower percentage than from mutual funds that pay a higher percentage because of the level of assets invested by the Accounts. 18 19 20 21 22 23 Opportunities to participate in educational and/or marketing activities offered by investment advisers or subadvisers of the mutual funds or their affiliates to employees of the Nationwide companies are not taken into account in determining the amount of payments received. 24 25 26 27 The Nationwide companies identify a menu of potential mutual funds that correspond to the investment options for their retirement products. They may consider several criteria when San Bernardino Administrative Agreement for Deferred Compensation Program - 25 Exhibit "A" 01 2 14 05 08 3 identifying those mutual funds, including some or all of the following: investment objectives, investment process, investment performance, risk characteristics, investment capabilities, experience and resources, investment consistency, and fund expenses. 4 5 In some cases, the Nationwide companies identify mutual funds based on requests and recommendations made by retirement plan sponsors and/or their advisors. Another factor the Nationwide companies consider during this process is whether the mutual fund's adviser or subadvisor is one of their affiliates or whether the mutual fund, its adviser, its subadviser(s), or an affiliate will make payments such as those described above. 6 7 8 9 10 11 You should consider all of the fees and charges of a retirement product in relation to the features and benefits of that product when making your decision to invest. The fees of the mutual funds being offered as part of the overall retirement product should also be considered in your decision. Please note that higher product and mutual fund fees and charges have a direct effect on the investment performance of your retirement savings. -. 12 13 16 17 18 19 20 21 22 23 24 25 26 27 San Bernardino Administrative Agreement for Deferred Compensation Program - 26 Exhibit "A" 01 014 15 2 Deferred Compensation Plan Administration Agreement 3 4 This Deferred Compensation Plan Administration Agreement is effecllve this day of by and between Nationwide Retirement Solutions, Inc., a wholly owned subsidiary of NFS Distributors, Inc., a wholly owned subsidiary of Nationwide Financial Services, Inc. an Ohio Corporation (hereinafter 'NRS'), and the City of San Bernardino, California (hereinafter "EMPLOYER'). 5 6 7 8 9 10 WHEREAS, EMPLOYER, pursuant to and in compliance with Internal Revenue Code Section 457, previously established a Deferred Compensation Plan, hereinafter referred to as PLAN; and 11 12 13 16 WHEREAS, EMPLOYER, pursuant to its Request for Negotiated Purchase (hereinafter "RNP') dated February 19, 2008, solicited bids to provide plan administration and recordkeeping services; and 17 18 WHEREAS, NRS responded to such RNP; and 19 20 WHEREAS, the EMPLOYER, desires to enter into a formal agreement pursuant to the terms of the RNP; and 21 22 23 WHEREAS, NRS desires to provide such non-discretionary administration and recordkeeping services subject to the terms and conditions set forth herein: 24 25 26 NOW THEREFORE, EMPLOYER and NRS agree as follows: 27 028 1. DESIGNATION San Bernardino Administrative Agreement for Deferred Compensation Program - 1 01 014 15 028 2 EMPLOYER designates NRS as Administrator for deferred compensation funds. 3 4 2. TERM 5 6 This Agreement shall remain in effect for an initial term of 6 years commencing as of the date listed herein, with the option for two {2} successive renewals thereafter at the Deferred Compensation Advisory Board of the EMPLOYER's option for two {2} years each or until it is terminated by one or both parties in accordance with the provisions of this Agreement. 7 8 9 10 11 3. DEFAULT 12 -. 13 In the event the Agreement is terminated for "Cause" {which shall mean the failure of either party to perform any or all of its obligations as defined herein}; the non-defaulting party shall give the defaulting party written notice, specifying the particulars of the default. If such default is not cured within sixty {60} days from the date in which notice of default is given, the non-defaulting party may terminate the Agreement effective thirty {3D} days after the end of the sixty {60} day period. 16 17 18 19 20 4. INVESTMENT OPTIONS 21 22 NRS agrees to accept deferred compensation plan funds for investment in the investment options referenced in Exhibit A hereto or such other options as mutually agreeable to the parties. 23 24 25 26 A. The following provisions will apply: 27 San B~rnardino Administrative Agreement for Deferred Compensation Program - 2 01 2 3 4 5 6 7 8 9 10 11 B. 12 13 1.. The investment options referenced in Exhibit A will be available to the Plan Participants. Dividends (if applicable) will be automatically reinvested into the mutua fund. 2. Investment Management or other charges may be imposed on any of the investmen options by the provider of such investment option. These charges will be disclosed in the investment option prospectus or other informational brochure. These charges, and along with any operating expenses of the investment, would be separate from any fees or charges described in this Agreement. Participants will be permitted to change their investment options as often as they wish, however, they shall be subject to any applicable penalty, charge, or restriction imposed for such change. 014 15 5. INVESTMENT GUIDANCE AND EDUCATION 16 17 A. NRS agrees to provide reports and information for the analysis by the EMPLOYER of Plan investments on an annual basis or upon any other frequency as the parties mutually agree. Services shall include and relate to all investment options of the Plan as follows: 18 19 20 21 22 24 1. General investment consulting and advice. 2. Monitoring and reporting of returns and evaluation of performance. 3. Discussion of reasons for underlover performance and performance in relation to an investment options objectives and alternatives. 23 25 26 27 B. Based upon the information in "AM above, NRS agrees to provide performance information to the EMPLOYER each year by April 1 regarding whether an investment 08 San Bernardino Administrative Agreement for Deferred Compensation Program - 3 01 04 15 08 2 should be retained, deleted, or added to the list of available investment options of the Plan. 3 4 C. Actions taken regarding the addition or deletion of investment options shall be specifically authorized by the Deferred Compensation Advisory Board of the 5 6 EMPLOYER. 7 8 D. NRS shall also provide education to Plan participants regarding the various investment options offered under the Plan. 9 10 11 6. ESTABLISHMENT OF ACCOUNTS 12 13 A. ENROLLMENT SERVICES 16 NRS agrees to process, or arrange to have processed, the enrollment of eligible employees who elect to participate in the Plan. NRS agrees to provide information and promotional material pursuant to the Plan for distribution to employees of EMPLOYER. subject to approval of such material by the Deferred Compensation Advisory Board of the EMPLOYER, such approval not to be unreasonably withheld. EMPLOYER agrees to 17 18 19 20 allow and facilitate the periodic distribution of such material to employees. 21 22 NRS agrees to conduct group presentations periodically for employees of EMPLOYER, to explain the Plan. The Deferred Compensation Advisory Board of the EMPLOYER agrees to facilitate the scheduling of such presentations and to provide facilities at which satisfactory attendance can be expected. NRS agrees that qualified personnel will be made available periodically to discuss the Plan with individual employees of EMPLOYER. 23 24 25 26 27 San Bernardino Administrative Agreement for Deferred Compensation Program - 4 01 10 11 12 13 014 15 16 17 18 19 20 21 22 23 24 25 26 27 08 B. DEFERRALS 2 3 The minimum participant deferral per pay period shall be not less than $10.00. 4 5 C. EMPLOYER agrees to: 6 7 1. Cause appropriate deductions to be made from such payroll(s) as may be applicable and send the funds representing the total participant deferrals to NRS. 8 9 2.. Provide to NRS in such electronic or magnetic media designated by NRS, a deferral listing with respect to participant sub-accounts to include not less than the following: Name of participant Social security number of participant Amount to be credited to participant's sub-account(s) 3. Funds may be sent by wire transfer, through an automated clearinghouse or by check in accordance with written instructions provided by NRS. Failure to follow the written instructions provided by NRS may result in delay of posting to Participant accounts. 4. Funds will be posted no later than the business day following the day on which the funds and the deferral listing are received by NRS. NRS will not be liable for any delay in posting if EMPLOYER fails to send either the funds representing deferral amounts or deferral information in accordance with NRS's instructions to the central processing site designated by NRS. 5. Authorize NRS to act upon instruction given by Participants pursuant to their San Bernardino Administrative Agreement for Deferred Compensation Program - 5 0 1 2 3 4 5 6 7 8 9 10 014 15 27 028 personal identification number (PIN), such PINs can be-used to obtain certain services as designated by NRS. D. NRS agrees to: 1. Establish a sub-account for each participant. 2. Post and credit the amounts sent by EMPLOYER to the sub-account(s) of Participants in accordance with the latest written instructions on file with NRS. 11 7. PARTICIPANT SERVICES 12 A. NRS will provide a dedicated toll free telephone number which shall be operative 24 hours per day, 7 days per week (less normal maintenance time) for the Interactive Voice Response (IVR), and for live Participant Service Representatives, Monday through Friday, 8 a.m. - 8 p.m. Eastern time, each business day. Using this number, participants may obtain information about participant accounts. EMPLOYER authorizes NRS to honor instructions, which may be submitted by participants using this number, either via the interactive voice response system (IVR), or to a live representative. Participant instructions may be in such form and content as may be mutually agreed to by NRS and EMPLOYER. 13 16 17 18 19 20 21 22 B. NRS will provide Plan participants unlimited opportunities to increase (within limitations of Sec. 457) or decrease deferral amounts. All requests to increase or decrease deferral amounts will be processed by NRS within five (5) business days of receipt of the request and will be effective as soon as administratively practical by EMPLOYER. 23 24 25 26 c. NRS will provide Plan participants unlimited opportunities to redirect future deferral amounts to any other investment option offered by the Plan. All requests will be San Bernardino ,Administrative Agreement. for Deferred Compensation Program - 6 01 10 11 12 13 014 15 16 17 18 19 20 21 22 23 24 25 26 27 028 2 processed within five (5) business days of receipt and will be effective with the next pay period deferral. 3 4 D. NRS will provide participants the daily ability to exchange existing account balances from one investment option offered by the Plan to another (except for the limitation described in Section 4 above). Exchange requests will be processed with the investment option being 'sold" by the next business day NRS receives such instructions and will be effective in the new investment not later than the day following NRS's receipt of funds from the 'sold" investment. 5 6 7 8 9 E. NRS will provide participants, if they request, a fund prospectus (or other informational brochure as applicable) and an annual report for each investment option offered by the Plan. Specific mutual fund prospectuses and other relevant information are to be provided by each respective mutual fund or other investment provider upon request by NRS or a participant. F. NRS will provide participants consolidated quarterly statements detailing participanfs year-to-clate deferral amounts, account balance information that includes changes in account value since the previous report date and any fees or charges assessed against the Participant account. Participants shall be informed that they must notify NRS within ninety (90) days of receipt of their statements or confirmation of their investments, to report any errors to NRS. NRS will not be liable for any errors not reported within this time frame. G. NRS agrees to mail 90% of these statements to participants within twenty (20) business days after the end of each calendar quarter. NRS will have no responsibility to report, or account for the accuracy of information applicable to periods prior to the effective date such Plan was administered by NRS. San Bernardino Administrative Agreement for Deferred Compensation Program - 7 01 014 15 08 2 H. NRS will provide certain standard reports quarterly to EMPLOYER to enable EMPLOYER to effectively monitor all accounting and record-keeping processes. These reports will include combined data for an entire Plan. (Fees and charges assessed will be disclosed in these reports.) In addition, all services will be provided in accordance with these reports. Copies are available upon request. 3 4 5 6 7 B I. NRS agrees to maintain, for a reasonable time, the records necessary to produce the above mentioned. reports, and agrees that all records shall be the property of EMPLOYER. EMPLOYER agrees that all related computer tapes, disks and programs shall remain the property of NRS. 9 10 11 12 13 J. NRS agrees to review submitted unforeseeable emergency withdrawal applications and make a determination regarding approval or denial based upon its interpretation of the Plan document and the requirements of the Internal Revenue Code. 16 17 8. DISTRIBUTIONS 18 19 A. NRS will assist the participant in preparing the necessary forms to select his/her 20 distribution option. 21 22 B. All lump sum distributions from participant accounts shall be made within five (5) business days of the earliest day permitted by the Plan. 23 24 25 C. For emergencylhardship withdrawal requests, NRS shall process or reject applications within five (5) business days. 26 27 San Bernardino Administrative Agreement for Deferred Compensation Program - 8 01 10 11 12 13 014 15 16 17 18 19 20 21 22 23 24 25 26 27 08 2 D. NRS will provide necessary forms and process payments from the participant's account, to the company selected by the Plan to provide annuity options to participants. Participant will be required to submit properly completed forms to NRS in a time frame necessary to effectuate the 'payment begin date" requested by participant. 3 4 5 6 E. NRS shall offer to participants for distribution of their account a designated amount payment option. Payments shall be made on a monthly, quarterly, semi-annual or annual basis as specified by the participant, in equal installments (not less than $25.00 per payment) until the amount applied, adjusted each business day for investment results, is exhausted. The final installment will be the sum remaining at the time such payment is due. 7 8 9 F. NRS shall offer to Plan participants a designated period payment option with a variable payment. Payments shall be made monthly, quarterly or annually for any specified number of years as permitted by the Plan, at the discretion of the Plan participant. The amount of each variable payment shall be determined by dividing the Participant's current portfolio balance by the number of remaining payments. G. NRS shall offer to Plan participants the ability to request a 'Priority Distribution" option. This option allows participants to designate a specific investment option from which their distributions will be made. Processing of priority distributions will continue until such time that the balance in the selected investment option is no longer adequate to make the elected distribution. At that time, additional distributions will be made on a pro-rata basis from all investment options. H. All payment options are available for all investment options. Participants selecting the options in E, F, or G above shall be subject to the same fees and charges, and permitted the same exchange opportunities, as an active or inactive participant as San Bernardino Administrative Agreement for Deferred Compensatiori Program - 9 01 014 15 08 2 defined by the Plan. Processing of these options will be completed by NRS upon receipt of properly completed forms, in a time frame necessary to effectuate the "payment begin date" on the third Monday of each month. Processing of the distribution option will be completed within three (3) business days of the payment begin date. All distributions will be made pro-rata from each of the Participant's investment options. 3 4 5 6 7 I. NRS will be responsible for preparing and filing all reports required by federal and state taxing authorities through the effective date of the termination of the contract. EMPLOYER shall be responsible for all reporting requirements for periodS prior to the effective date of this contract, or after the termination date of this contract. NRS will be responsible for the annual filing of individual 1 099 or W-2 forms, unless by contract between EMPLOYER and an Investment Provider, the forms are prepared by the Investment Provider that provides annuity payments to participants. NRS shall withhold income taxes from distributions as required, and remit said taxes to appropriate regulatory authorities. NRS shall also prepare and file periodic and annual tax returns to said amounts withheld. 8 9 10 11 12 13 16 17 18 ~. NRS agrees to provide plan participants anticipating retirement or other separation from service with illustrations indicating monthly benefit payments at an assumed interest rat for savings accounts or an assumed rate of earnings for mutual fund investments. Such assumed interest rate or rate of earnings shall be for illustration purposes only. The actual interest ratelyield paid on saving products during distribution shall change quarterly. For mutual funds, earnings will be those actually earned. 19 20 21 22 23 24 25 9. TERMINATION 26 27 Upon the effective date of termination of this Agreement, the following shall occur. San Bernardino Administrative Agreement for Deferred Compensation Program - 10 01 014 15 08 2 A. NRS will no longer accept deferrals. In addition, upon n'otification of termination, NRS will cease opening certificate of deposits, if applicable. 3 4 B. NRS will provide EMPLOYER a copy of all records relating to participant sub-accounts, in hard copy or such other form as mutually agreed upon between NRS and EMPLOYER, within ninety (90) days after the effective date of temination. 5 6 7 8 c. This Agreement may be terminated for the convenience of the EMPLOYER upon thirty (30) days written notice to NRS. Upon such notice, NRS shall provide all records as noted in Section B to 9 10 EMPLOYER. 11 12 D. If termination is due to either party exercising the right of termination described in Section 3 above, within 45 days of the effective date of termination, NRS will transfer savings account balances (less any early withdrawal penalty imposed) to EMPLOYER, or to such other entity as EMPLOYER may designate in writing. Mutual funds will be transferred to EMPLOYER or to such other entity as EMPLOYER may designate in writing. 13 16 17 18 19 E. Accounts in distribution will be transferred to EMPLOYER or its designee in accordance with the time frame described above. 20 21 22 10. FEES AND EXPENSES 23 24 The fee for the investment options shall be 0.00% except as noted on Exhibit B. Exhibit 8 contains the terms and conditions under which a fee will be applied to specified investment options under the Plan. Any fees, including investment management fees, associated with the investment options are separate from fees imposed by NRS as administrator of the Plan. 25 26 27 San Bernardino Administrative Agreement for Deferred Compensation Program - 11 01 O. 14 15 028 2 NRS shall receive, as its compensation for services provided pursuant to this Agreement, the service payments from the Plan's investment options or their affiliates. Further information on the service payments that Nationwide receives from investment options or their affiliates is attached in Exhibit C. 3 4 5 6 7 NRS shall provide EMPLOYER up to $5000.00 per year from the service payments that ar received from the Plan's investment options (or their affiliates) to reimburse EMPLOYER fo the training expenses of the Deferred Compensation Advisory Board of the EMPLOYER'S board members. NRS shall also provide EMPLOYER $48,000.00 in the first year of this Agreement from the service payments that are received from the Plan's investment options (or their affiliates) to reimburse EMPLOYER for the salary of an Accountant I position. This amount used to reimburse EMPLOYER for an Accountant I salary shall be increased by 3 each year after the first year that this Agreement remains in effect. -. 8 9 10 11 12 13 16 Should the service payments that are received from the Plan's investment options (or their affiliates) be insufficient to compensate NRS for the services provided pursuant to this Agreement or to reimburse EMPLOYER for the training expenses of the Deferred Compensation Advisory Board of the EMPLOYER'S board members or for the salary of an Accountant I position, EMPLOYER agrees to renegotiate the fees, expenses and Nationwide's compensation under this Agreement. 17 18 19 20 21 22 23 11. CONFIDENTIALITY 24 25 NRS agrees that all information supplied to and all work processed or completed by NRS shall be kept confidential and will not be disclosed except as required by law. 26 27 San Bernardino Administrative Agreement for Deferred Compensation Program - 12 o 1 12. PRIVITY OF CONTRACT 2 014 15 08 3 NRS and Plan Participants shall have no privity of contract with each other. 4 5 13. TITLE AND OWNERSHIP 6 7 In accordance with the provisions of Internal Revenue Code Section 457, all account(s) established under this Agreement shall be held in the name of EMPLOYER, or by a Trustee/Custodian with a multi-employer 'omnibus account" for the benefit of participants, in accordance with the Plan. 8 9 10 11 12 14. CIRCUMSTANCES EXCUSING PERFORMANCE -. 13 16 Neither party to the Contract shall be in default by reason of failure to perform in accordance with its terms if such failure arises out of causes beyond reasonable control and without fault or negligence on their part. Such causes may include, but are not limited to, acts of God or public enemy, acts of the government in either its sovereign or contractual capacity, fires, floods, epidemics, quarantine or restrictions, freight embargoes, and unusually severe weather. 17 18 19 20 21 15.INDEMNIFICATION 22 23 NRS agrees to defend, indemnify, and hold harmless the EMPLOYER, its officials, employees, and agents from all loss, cost, and expense arising out of any loss or injury sustained by anyone in connection with NRS's acts, errors, or omissions, or any of those of its officers, agents, or employees, whether such act is authorized by this agreement or not; and shall pay for any and all damages to EMPLOYER's property and funds of the EMPLOYER, or loss or theft of such property or funds. The Provisions of this Article do not 24 25 26 27 San Bernardino Administrative Agreement for Deferred Compensation Program - 13 01 O. 14 15 08 2 apply to any damage or loss caused solely by the aCts, errors, or omissions of the EMPLOYER, its officials, employees, or agents. 3 4 EMPLOYER agrees to defend, indemnify, and hold harmless NRS, its officials, employees, and agents from all loss, cost, and expense arising out of any loss or injury sustained by anyone in connection with the EMPLOYER's acts, errors, or omissions, or any of those of its officers, agents, or employees, whether such act is authorized by this agreement or not; and shall pay for any and all damages to NRS's property and funds of NRS, or loss or theft of such property or funds. The Provisions of this Article do not apply to any damage or loss caused solely by the acts, errors, or omissions of NRS, its officials, employees, or agents. 5 6 7 8 9 10 11 12 16. PREVAILING PARTY 13 The prevailing party in any legal action to enforce or interpret any provision of this Agreement will be entitled to recover from the losing party all reasonable attorneys' fees, court costs, and necessary disbursements in connection with that action. The costs, salary, and expenses of the City Attorney and members of his office, in connection with that action shall be considered as attorneys' fees for the purposes of this Agreement. 16 17 18 19 17. ASSIGNABILITY 20 21 No party to this Agreement shall assign the same without the express written consent of the other party, which consent shall not to be unreasonably withheld. This provision shall not restrict NRS's right to delegate certain services to an agent, including any affiliate. Unless agreed to by the parties, no such assignment shall relieve any party to this Agreement of any duties or responsibilities herein. 22 23 24 25 26 27 18. PARTIES BOUND San Bernardino Administrative Agreement for Deferred Compensation Program - 14 01 014 15 21 028 2 This Agreement and the provisions thereof shall be binding' upon and shall inure to the benefit of the successors and assigns of the respective parties. 3 4 19. APPLICABLE LAW 5 6 This Agreement shall be construed in accordance with the laws operating within the State of California. 1 8 9 20. UNLAWFUL PROVISIONS 10 11 In the event any provisions of this Agreement shall be held illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts of the Agreement, but the same shall be construed and enforced as if said illegal or invalid provisions had never been inserted herein. Notwithstanding anything contained herein to the contrary, no party to this Agreement will be required to perform or render any services hereunder, the performance or rendition of which would be in violation of any laws relating thereto. 12 13 16 11 18 21. MODIFICATION 19 20 This writing is intended both as the final expression of the Agreement between the parties and as a complete statement of the terms of the Agreement. No modification of this Agreement shall be effective unless and until such modification is evidenced by a writing signed by both parties. 21 22 23 24 25 22. NO WAIVER 26 The failure of either party to enforce any provision of this Agreement shall not be construed as a waiver of that provision or of any other provision in the Agreement and neither party San Bernardino Administrative Agreement for Deferred Compensation .Program - 15 01 014 15 08 2 may, at any time, enforce the provision previously Waived, unless a modification to this Agreement has been executed. 3 4 23. SEVERABILITY 5 6 The provisions of this Contract are severable, and, if for any reason a clause, sentence, paragraph, or other part of this Contract shall be determined to be invalid by a court or- federal or state EMPLOYER, board, or commission having jurisdiction over the subject matter thereof, such invalidity shall not affect other provisions of this Contract which can be given effect without the invalid provision. 7 8 9 10 11 12 24. NOTICES 13 16 All notices and demands to be given under this Agreement by one party to another shall be given by certified or United States mail, addressed to the party to be notified or upon whom a demand is being made, at the addresses set forth in this Agreement or such other place a either party may, from time to time, designate in writing to the other party. Notice shall be d$'lemed received on the earlier of, 3 days from the date of mailing, or the day the notice is actually received by the party to whom the notice was sent. 17 18 19 20 21 22 23 24 25 26 27 San Bernardino Administrative Agreement for Deferred Compensation Program - 16 01 0.14 15 08 If to NRS: Nationwide Retirement Solutions, Inc. Attention: Lance Kesterson 2 3 5900 Parkwood Drive Dublin, Ohio 43016 4 5 6 If to EMPLOYER: City of San Bernardino Attn: Georgia Chamberlain, Deferred Compensation Liaison 300 North "D' Street San Bernardino, California 92418-0001 7 8 9 10 11 25. ENTIRE AGREEMENT 12 13 This Agreement, along with any other investment product contracts necessitated by Exhibit A, constitutes the entire agreement between the EMPLOYER and NRS, its affiliates, successors, or assigns. The Parties warrant that this Agreement replaces and supercedes any prior agreement between the Parties or their affiliates. 16 17 18 IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective on the date first written above. 19 20 21 EMPLOYER Nationwide Retirement Solutions, Inc. 22 23 By: By: 24 25 Date: Date: 26 , .. 27 AI' OVEjL~:STo-FORM:':, .~. ?~ ' es F. Penman, y Attorney San ~~~~~"~ nAm;";a~~~~ive Agreement for Deferred Compensation Program - 17 01 14 015 16 C. 17 18 19 20 21 08 Exhibit A 2 3 This Exhibit is hereby made part of the Deferred Compensation Plan Administration Agreement between NRS, and EMPLOYER. These investment options, or those added through subsequent amendment or exhibit are the current investment options available under the deferred compensation plan. Further: 4 5 6 7 8 A. EMPLOYER and NRS agree that the following investment options in this Exhibit, or those added through subsequent amendment or exhibit are the 2!!!l.investment options available under the deferred compensation plan. 9 10 11 12 B. EMPLOYER and NRS agree that the Deferred Compensation Advisory Board of the EMPLOYER must agree to all changes in the investment options made available to the Plan, except those changes required directly by the investment provider. 13 EMPLOYER agrees the effective date for offering new investment options will be the first day of the month at least one month subsequent to the month an Amended Exhibit A may be executed, or such other date upon which the parties mutually agree. List of Investment Options 22 Investor Destinations Aggressive Fund - Service Class Investor Destinations Conservative Fund - Service Class Investor Destinations Moderate Fund - Service Class 23 24 25 Investor Destinations Moderately Aggressive Fund - Service Class Investor Destinations Moderately Conservative Fund - Service Class Oppenheimer Global Fund - A 26 27 San Bernardino Administrative Agreement for Deferred Compensation Program - 18 0 1 American Funds EuroPacific Growth Fund 2 Dreyfus International Stock Fund 3 DFA U.S. Micro Cap Company Portfolio 4 Allianz NFJ Small Cap Value Fund 5 LeggMP Small Cap Growth - Class A 6 Neuberger Berman Genesis - Trust Class 7 American Century Vista Fund 8 Dreyfus MidCap Index Fund 9 JP Morgan MidCap Value A 10 American Century Equity Income Fund 11 Fidelity Contra Fund 12 Fidelity Equity Income Fund 13 American Funds Growth Fund of America 14 American Funds Investment Company of America 015 Janus Fund 16 Neuberger Berman Socially Responsive Fund 17 Nationwide Fund-A 18 Vanguard Windsor II Fund 19 Vanguard Institutionallnclex Portfolio 20 American Funds Income Fund of America 21 PIMCO High-Yield Fund - Administrative Shares 22 PIMCO Total Return Fund - Administrative Shares 23 Vanguard Total Bond Market Index Fund 24 T. Rowe Price Retirement 2015 Advisor 25 T. Rowe Price Retirement 2025 Advisor 26 1. Rowe Price Retirement 2035 Advisor 27 T. Rowe Price Retirement 2045 Advisor 028 San Bernardino Administrative Agreement for Deferred Compensation Program - 19 5 Galliard Stable Value Fund 6 7 B EMPLOYER: 9 10 11 By: 12 13 01 2 3 4 14 Date: 015 16 17 18 19 20 21 22 23 24 25 26 27 08 T. Rowe Price Retirement Income Fund Advisor Washington Mutual Liquid Savings Accounts Washington Mutual Certificates of Deposit Nationwide Life Insurance Company Group Fixed Annuity Contract TSP-557 Nationwide Retirement Solutions, Inc. By: -. Date: APPROVED AS TO FORM: James F. Penman, Clty Attorney By: !., San Bernardino Administrative Agreement for Deferred Compensation Program - 20 01 2 3 4 5 6 7 8 Exhibit B Effective June 16, 2008, this Exhibit B becomes part of the Deferred Compensation Plan Administration Agreement (hereinafter "Agreement") between Nationwide Retirement Solutions, Inc. (hereinafter "NRS") and the City of San Bernardino, California (hereinafter "EMPLOYER") and is designed to memorialize the following additional terms that will apply to the offering of various investment options under the Agreement. 10 9 Galliard Stable Value Fund: 11 1. 12 13 014 15 2. 16 17 18 19 3. 20 21 22 23 4. 24 25 26 27 028 NRS will provide administration and recordkeeping services as described in the Agreement for the Stable Value Fund (hereinafter "SVF") offered through Galliard Capital Management, Inc. The SVF is not a mutual fund, but rather a collective investment trust or a pooled fund. Charges and reimbursements for this investment option are different from those of traditional mutual funds. The fee for the SVF includes a Galliard Management Fee of. .15% as well as a Plan Administration fee. The total of these fees will be included daily in the unit value calculation of the participant's value in the SVF, and will not be reflected as a charge on the account. The Plan Administration Fee shall be the difference between the .59% and the Galliard Management Fee, which represents the total fee on an annualized basis. San Bernardino Administrative Agreement for Deferred Compensation. Program - 21 o 1 EMPLOYER: 2 3 4 By: 5 6 7 Date: 8 9 10 11 12 13 014 15 16 17 18 19 20 21 22 23 24 25 26 27 08 Nationwide Retirement Solutions. Inc. By: Date: APPROVED AS TO FORM: James F. Penman. City Attorney /~ San Bernardino Administrative Agreement for Deferred Compensation Program - 22 01 014 15 08 Exhibit C 2 Nationwide Retirement Solutions, Inc., offers a variety of unregistered group variable annuity contracts and mutual fund platforms (collectively referred to as "retirement products.). Those retirement products are sold exclusively in the public sector retirement markets through NRS's life insurance and trust company affiliates (collectively referred to as the "Nationwide companies.) 3 4 5 6 7 8 The variable accounts, trust accounts, or custodial accounts (the "Accounts.) that accompany the retirement products offer investment options, and purchase and sell shares of certain mutual funds in the aggregate each day so that the performance of the investment options corresponds to the performance of those mutual funds. When the Accounts aggregate these transactions, the mutual fund does not incur the expense of processing individual transactions that it would incur if it sold its shares to the public directly. This expense is instead incurred by the Nationwide companies. 9 10 11 12 13 16 The Nationwide companies also incur the distribution costs associated with selling the retirement products, which benefJtsthe mutual funds by providing contract owners and participants with investment options that correspond to the underlying mutual funds. An investment adviser or subadviser of a mutual fund or its affiliates may provide the Nationwide companies with wholesaling services that assist in the distribution of the retirement products and may pay to participate in educational and/or marketing activities. These activities may provide the adviser or subadviser (or their affiliates) with increased exposure to persons involved in the distribution of the retirement products. 17 18 19 20 21 22 23 24 25 In light of the above, certain mutual funds or their affiliates make payments to the Nationwide companies (the "payments.). The amount of these payments is typically based on an agreed upon percentage times the amount of assets that the Accounts invest in the mutual funds. These payments may be used for any corporate purpose, which includes reducing the price of 26 27 San Bernardino Administrative Agreement for Deferred Compensation Program - 23 01 014 15 028 2 the retirement products, paying expenses that the Nationwide companies incur in promoting, marketing, and administering the retirement products, and achieving a profIt. The Nationwide companies receive the following types of payments: 3 4 5 . Mutual fund 12b-1 fees, which are deducted from mutual fund assets; . Sub-transfer agent fees or fees pursuant to administrative service plans adopted by the mutual fund, which may be deducted from mutual fund assets; and . Payments by a mutual fund's adviser or subadviser (or its affiliates). Such payments 6 7 8 9 may be derived, in whole or in part, from the advisory fee that is deducted from mutual 10 fund assets and reflected in the mutual fund charges. 11 12 Furthermore, the Nationwide companies benefit when assets are invested in Nationwide's affiliated mutual funds (i.e., Nationwide Variable Insurance Trust and/or Nationwide Mutual Funds) because their affiliates also receive compensation from the mutual funds for investment advisory, administrative, transfer agency, distribution, and/or other services. Thus, the N.ationwide companies may receive more revenue with respect to affiliated mutual funds than unaffiliated mutual funds. 13 16 17 18 19 The Nationwide companies took these anticipated payments into consideration in determining the charges they impose under the retirement products (apart from fees and expenses imposed by the mutual funds). Without these payments, the Nationwide companies would have imposed higher charges on their retirement products. 20 21 22 23 24 For the year ended December 31, 2007, for public sector retirement products, the maximum payments that the Nationwide companies received from the mutual funds and their affiliates (as a percentage of the average daily net assets of the mutual funds attributable to the retirement products) and weighted average payments were: 25 26 27 San Bernardino Administrative Agreement for Deferred Compensation Program - 24 01 d: 08 Maximum Percentage !Weighted Averages- 2 Public sector retirement 0.75% 0.266% 3 products. 4 .Excludes select public sector retirement plan assets where the Nationwide companies either do not have agreements to receive any payments from the mutual funds or do not retain payments from the mutual funds. 5 6 7 **Weighted averages are the product of actual payments the Nationwide companies eamed divided by annual average mutual fund assets (using quarter-end balances). All mutual funds available in a line of business are included when determining average mutual fund assets, regardless of whether the mutual funds or their affiliates actually made any payments to the Nationwide companies during the year, subject to the exclusion noted above. 8 9 10 11 12 -. 13 Most mutual funds or their affiliates have agreed to make payments to the Nationwide companies, although the amount ofthe payment may vary from mutual fund to mutual fund. Some mutual funds may not make any payments at all. 16 17 The amount of the actual payments the Nationwide companies receive is based on an agreed upon percentage times the amount of assets invested by the Accounts in the mutual funds. As such, the Nationwide companies may receive higher payments from mutual funds that pay a lower percentage than from mutual funds that pay a higher percentage because of the level of assets invested by the Accounts. 18 19 20 21 22 23 Opportunities to participate in educational and/or marketing activities offered by investment advisers or subadvisers of the mutual funds or their affiliates to employees of the Nationwide companies are not taken into account in determining the amount of payments received. 24 25 26 27 The Nationwide companies identify a menu of potential mutual funds that correspond to the investment options for their retirement products. They may consider several criteria when San Bernardino Administrative Agreement for Deferred Compensation Program - 25 01 014 15 028 2 identifying those mutual funds, including some or all of the folloWing: investment objectives, investment process, investment performance, risk characteristics, investment capabilities, experience and resources, investment consistency, and fund expenses. 3 4 5 In some cases, the Nationwide companies identify mutual funds based on requests and recommendations made by retirement plan sponsors and/or their advisors. Another factor the Nationwide companies consider during this process is whether the mutual fund's adviser or subadvisor is one of their affiliates or whether the mutual fund, its adviser, its subadviser(s), or an affiliate will make payments such as those described above. 6 7 8 9 10 11 You should consider all of the fees and charges of a retirement product in relation to the features and benefits of that product when making your decision to invest. The fees of the mutual funds being offered as part of the overall retirement product should also be considered in your decision. Please note that higher product and mutual fund fees and charges have a direct effect on the investment performance of your retirement savings. 12 13 16 17 18 19 20 21 22 23 24 25 26 27 San Bernardino Administrative Agreement for Deferred Compensation Program - 26